Stock Market Update: Corporate Earnings Going Global

Group 1 - The core driver of market returns in the long term is earnings growth, while in the short term, multiple expansion or contraction plays a significant role [1][3]. - The S&P 500 Index return decomposition shows that over the long term, earnings growth (represented by grey bars) dominates compared to dividends and multiple expansion [2]. - Earnings estimates for 2026 have increased by 12% for emerging markets since last summer, with Japan and TSX also experiencing positive revisions [4]. Group 2 - Japan, emerging markets, and TSX are identified as the best-performing markets for 2026, although there is less enthusiasm for TSX due to its earnings growth being primarily driven by the materials sector, particularly gold [4]. - The U.S. market has seen positive earnings revisions in the technology sector, which has been underperforming recently [6]. - Overall, the global earnings growth trend is positive, contributing to market resilience despite recent headline challenges [7].